Plaintiff (Attorney Lee E-soo et al., Counsel for the plaintiff-appellant)

Defendant 1 and one other (Dongwon General Law Firm, Attorneys Kim Jong-jin et al., Counsel for the defendant-appellant)

May 2, 2018

Seoul Central District Court Decision 2016Kahap50696 Decided March 17, 2017

1. The plaintiff's appeal against the defendants is dismissed.

2. The plaintiff's claims added by this court against the defendants are all dismissed.

3. The costs of the lawsuit after the appeal shall be borne by the plaintiff.

1. Purport of claim

A. On September 27, 2015, the first instance court’s co-defendant 1 (hereinafter “non-party 1”) revoked the Defendants’ intent to waive a testamentary gift with respect to the real estate stated in the separate sheet (hereinafter “instant real estate”) on September 27, 2015.

B. As to shares of 1/4 of the instant real estate, the Defendants:

1) On September 4, 2015, the Seoul Central District Court: (a) carried out the procedure for registration of cancellation of ownership transfer registration (hereinafter “instant share transfer registration”) completed under Article 239733 of the Seoul Central District Court’s receipt; and

2) On May 7, 1998, Nonparty 1 entered into the procedure for the registration of ownership transfer due to legacy.

[Plaintiff, in its first place, sought implementation of the procedure of cancellation registration on the ground that the registration of ownership transfer of this case is null and void on the ground that the registration of ownership transfer of this case is cancelled on the ground that the act of renunciation of the legacy of Nonparty 1 was a fraudulent act and restitution, and sought implementation of the procedure of cancellation registration of ownership transfer of this case on the ground that the act of renunciation of the legacy of Nonparty 1 was a fraudulent act, but this court withdraws each of the above main claims against the Defendants, and added the claim of registration of ownership transfer

2. Purport of appeal

Of the judgment of the first instance court, the part against the Defendants is revoked. Nonparty 1’s declaration of waiver to Nonparty 2’s legacy with respect to the instant real estate shall be revoked. The Defendants shall implement the registration procedure for cancellation of each registration of cancellation of the instant share transfer with respect to each of 1/4 shares out of the instant real estate to the Plaintiff.

1. Basic facts

A. On April 1, 2006, the Plaintiff lent KRW 200 million to Nonparty 1, and the maturity period between Nonparty 1 and Nonparty 1 shall be July 31, 2006. The interest shall be paid at KRW 4.8 million on the last day of each month from the end of April 2006, and the interest shall be paid at KRW 4.8 million on the last day of each month. If the principal is delayed, the Plaintiff agreed to pay damages for delay calculated at the rate of 25% per annum with respect to the principal. The co-defendant 3 of the first instance trial jointly and severally guaranteed the above obligation against Nonparty 1.

B. On May 7, 1998, Nonparty 1’s father, the deceased Nonparty 2 (hereinafter “the deceased”) drafted a testamentary document stating that Nonparty 1 will designate Nonparty 4 as the executor of the testamentary gift (hereinafter “instant testamentary gift”).

C. When the Deceased died on or around April 4, 2015, Nonparty 5, the creditor of Nonparty 1, subrogated to Nonparty 1, etc. on September 4, 2015 due to the final and conclusive judgment of the Seoul Central District Court 2009Kadan148661, and completed the registration of transfer of the instant share transfer from Nonparty 1, Nonparty 7, and the Defendants’ respective shares of co-ownership.

D. Meanwhile, in 2015, Nonparty 1, after the deceased’s death, expressed to the deceased’s heir, including the Defendants, his/her intent to succeed to the shares of inheritance without receiving the instant legacy.

[Reasons for Recognition] Facts without dispute, Gap evidence Nos. 1, 2, 3, 8, 9, and 10; non-party 6's testimony of the party-trial witness; substantial facts in this court; the purport of the whole pleadings

2. Determination on the revocation of fraudulent act and the claim for restitution

A. Summary of the plaintiff's assertion

Although Nonparty 1 was liable to pay the Plaintiff the loan amount of KRW 200 million and delay damages therefor, Nonparty 1 expressed the deceased Nonparty 2’s intent to waive the legacy of the instant real estate from the deceased Nonparty 2 on or around September 27, 2015. Nonparty 1’s renunciation of testamentary gift constitutes a fraudulent act that reduces joint collateral against the general creditors including the Plaintiff. Therefore, Nonparty 1’s creditor, the Plaintiff, the beneficiary of the said fraudulent act, can seek implementation of the procedure for registration of cancellation of the instant share transfer registration, which was completed in the name of the Defendants, as the revocation of Nonparty 1’s renunciation of testamentary gift and its restitution.

B. Determination

1) According to the above basic facts, Nonparty 1 is obligated to pay to the Plaintiff the loan amount of KRW 200 million and the damages for delay calculated at the rate of 25% per annum from August 1, 2006 to the date of full payment after the maturity date. Meanwhile, in full view of the purport of evidence No. 5-1, 2, and 3 and all arguments, Nonparty 1 was in excess of the obligation at the time of renunciation of the testamentary gift of this case.

2) However, the renunciation of testamentary gift cannot be deemed as a juristic act that is subject to the revocation of fraudulent act under Article 406(1) of the Civil Act for the following reasons.

A) As to the act of giving up a general legacy, ① a person who takes over a general legacy has the same rights and duties as an inheritor (Article 1078 of the Civil Act). As such, Articles 1019 through 104 of the Civil Act concerning the approval and renunciation of inheritance, not Articles 1074 through 1077 of the Civil Act, should be applied. ② The renunciation of inheritance does not constitute “legal act regarding property rights” under Article 406(1) of the Civil Act, and thus cannot be subject to revocation of fraudulent act (see Supreme Court Decision 2011Da29307, Jun. 9, 201).

B) Following the following: (i) even if a legal act affecting the obligor’s property interest is a waiver of a testamentary gift, the act must be left to the obligor’s free will, such as refusal of the gift and labor provision contract; (ii) only if the contract is concluded, the donor may refuse the gift freely in a manner that does not express his/her consent to the offer of the testamentary gift. Such refusal of the gift cannot be subject to revocation of fraudulent act; (ii) the obligee’s refusal of the testamentary gift is not allowed in principle to exercise the testamentary gift based on the obligee’s right to the testamentary gift (see Supreme Court Decision 2011Da10527, Mar. 29, 201). (iii) It is more reasonable to view that the testamentary donee’s heir’s free will to waive the testamentary gift to the extent that the testamentary donee’s heir’s property cannot be seen as being subject to revocation of the testamentary gift (see Supreme Court Decision 201Da100527, Apr. 1, 2007).

C) Therefore, under the premise that the renunciation of the testamentary gift of this case made by Nonparty 1 can be subject to the revocation of fraudulent act, the Plaintiff’s claim for the revocation of the renunciation of the testamentary gift and the restoration to the original state (the cancellation of the transfer registration of this case) cannot be accepted without further review.

3. Determination on the legitimacy of a claim for ownership transfer registration based on a creditor's subrogation right

Inasmuch as an executor has the right and duty to manage an asset which is the subject of testamentary gift and to perform all other acts necessary for the execution of a will (Article 1101 of the Civil Act), in a lawsuit seeking the performance of testamentary gift with respect to an object of testamentary gift, the executor of the will shall be deemed to have the standing to be a person in charge of legal action. If an executor exists, the executor’s right to dispose of inherited property of the inheritor to the extent necessary for the execution of his/her testament, and the inheritor shall be deemed to have no standing to be a defendant (see, e.g., Supreme Court Decision 2009Da20840, Oct.

According to the above facts, since the deceased non-party 2 was designated as the executor at the time of the testamentary gift in this case, the plaintiff, the creditor of the non-party 1, sought implementation of testamentary gift on the real estate in this case subject to testamentary gift based on the creditor's subrogation right, is against the non-party 4 who is the executor of the will, and the defendants who did not have the right to dispose of the real estate in this case are not qualified.

Therefore, the Plaintiff’s claim is unlawful (it is reasonable to deem that Nonparty 1 expressed his intent to waive the instant legacy to the deceased Nonparty 2’s other inheritors around the end of the year 2015, on the ground that the Plaintiff’s claim against a non-qualified person was made against the Defendant, and thus, it is unreasonable to deem that Nonparty 1 expressed his intent to waive the instant legacy to the deceased Nonparty 2’s other inheritors. Accordingly, the instant legacy should be deemed to have become retroactively effective upon the deceased Nonparty 2’s death. Accordingly, the Plaintiff’s claim against the Defendants for the registration of ownership transfer on the ground of the instant legacy cannot be accepted without need to further examine, on the premise that the instant legacy is valid.)

4. Conclusion

Therefore, the part of the plaintiff's claim for the transfer registration of share in the lawsuit of this case against the defendants is unlawful, and the remaining claims shall be dismissed, without merit. The judgment of the court of first instance that dismissed the claim for the cancellation of the renunciation of the testamentary gift of this case and the claim for restitution of the original state (the claim for the cancellation of the transfer registration of share in this case) is justifiable in conclusion. Thus, the plaintiff's appeal is dismissed, and all the claims for the transfer registration of share in this case added by this court

[Attachment]

Judges Lee Jong-young (Presiding Judge)